The emergence of new ‘concept stores’ on supermarket real estate

Posted by AFN Staff Writers on 13th May 2013

Major Australian supermarkets appear to be gradually moving towards new store formats that will offer additional services or attempt to create a more ‘market-style’ environment.

Woolworths recently advertised positions available for qualified butchers for its “exciting new concept stores”. Woolworths supermarkets also appear to be gradually changing their approach to the format of stores, perhaps in an attempt to emulate its rival Coles’ strategy of focusing on the customer in-store ‘experience’.

In April 2013 Australian Food News reported that Woolworths had opened a ‘beauty bar’ in its Sydney Town Hall store, saying that the concept may be extended to other stores if it proved popular.

Woolworth ‘2015 Market’ format

Meanwhile, in the last eighteen months, Woolworths has also opened several “market-style” stores across Australia.

In March 2012, Woolworths opened a new store that featured what it called the ‘2015 Market format’ in Canberra at Majura Park, which is adjacent to Canberra Airport.

At the time, Woolworths said the 2015 Market format aimed to connect customers more directly with fresh producers, and that the format would be progressively introduced as new supermarkets were opened or existing stores were refurbished across its network. The supermarket said that its stores would increasingly have a focus on “wellness and healthy-living” products such as its own Macro Wholefoods Market brand.

Woolworths also opened a 2015 Market format store in Yarrawonga in Victoria in March 2012.

“We have set about creating a food market which brings customers into the fresh area, inspires meal ideas, provides a wide choice of healthy options and delivers a huge range of grocery lines at great prices,” Helen Hendren, Woolworths Yarrawonga store manager said at the time of the store’s opening.

Woolworths also owns the Thomas Dux specialty grocer brand, which has stores in Sydney and Melbourne. Woolworths said all fruit and vegetables sold at the Thomas Dux stores are sourced directly from Sydney and Melbourne markets, and that the stores have organic, gluten-free, preservative-free and free-range labels. The Thomas Dux stores also have delicatessens available for catering.

Coles ‘concept’ stores

Woolworths’ rival Coles has not been left behind in the trend towards ‘concept’ stores, opening its own version of such a store in December 2012 in Melbourne’s Southland shopping centre.

The Coles ‘concept’ store features iPad screens for shoppers to browse specials and send recipes to their smart phones, a ‘Mix Apparel’ virtual change room that allows consumers to ‘try on’ clothes through an interactive screen, an in-store kitchen with freshly prepared meals, sushi chefs preparing fresh sushi, an in-store café barista-made coffee and an in-store patisserie.

Global supermarket ‘service’ stores

The trend towards different supermarket formats is not limited to Australia. UK-based food industry consulting and research firm Technomic noted in January 2013 that a “growing number of retailers have been enhancing their overall positioning with a focus that extends beyond retail foodservice products.”

According to Technomic, this trend has seen supermarkets develop “distinct food concepts” and in-store restaurant-style dining experiences. UK supermarket groups Asda and Waitrose have both introduced restaurant or café-style dining to their stores in recent years.

“Foodservice retailers developing in-store restaurants may take a significant portion of market share away from traditional restaurants, particularly during the week,” David Wilkinson, Technomic’s UK Business Development Director, wrote on the Company’s website.

Taking a different strategy that focused less on getting customers to enter its stores, in 2010, another UK supermarket chain, Tesco, tested a ‘drive through supermarket’. The concept allowed customers to order their groceries online and specify a two-hour window in which they would pick the groceries up from the store. The store’s staff would then pack the ordered items into the customer’s car.